Tensions flare between Japan, North Korea at nuclear talks

BEIJING—The banking dispute that held up nuclear talks with North Korea for more than a year appeared to be resolved Monday, but tensions between Japan and the North could become a new obstruction to negotiations on dismantling the reclusive nation's nuclear programs.

At the opening of a new round of six-nation talks, North Korea's chief negotiator questioned the right of Japan's envoy to be present and charged that Japan has refused to provide energy assistance as part of a six-nation accord signed in mid-February.

In Tokyo, Japanese Prime Minister Shinzo Abe dismissed the remarks.

"It is not for North Korea to decide whether or not Japan can join" the six-party talks, Abe said, according to Japan's Kyodo news agency.

Later, U.S. nuclear negotiator Christopher Hill urged North Korea to "do more to address its relationship with Japan" and criticized Pyongyang's envoys for walking out of a meeting between the two sides in Hanoi earlier this month.

"I can't imagine a country in Northeast Asia being successful without having good relations with Japan," Hill said.

Under the broad agreement reached Feb. 13, North Korea is to open its doors to international nuclear monitors and take steps toward sealing its Yongbyon nuclear reactor within 60 days. In return, it'll receive 50,000 tons of heavy fuel oil and commitments from other nations, including the United States, to engage in direct talks on diplomatic recognition, security guarantees and new energy assistance.

U.S. officials removed a major obstacle in the talks, lifting a freeze of roughly $25 million in North Korean funds in a bank in Macau, an autonomous enclave of China. The Bush administration in September 2005 had accused the Banco Delta Asia of laundering money for North Korea, including funds from missile sales, and allowing it to filter counterfeit U.S. dollars into the global market. The administration has produced no evidence to support the charge, instead acting under a provision of the Patriot Act.

Daniel Glaser, a deputy assistant Treasury Department secretary, read a statement saying that North Korea asked that the frozen funds be transferred to an account at the Bank of China in Beijing.

"North Korea has pledged ... that these funds will be used solely for the betterment of the North Korean people, including for humanitarian and educational purposes," Glaser said, adding that the dispute is now over.

In a statement Monday night, Macau's monetary authority made no mention of the transfer, simply stating that the bank's frozen assets would be returned "in accordance with the instructions of account holders."

The South Korean envoy to the nuclear talks, Chun Yung-woo, said the release of the funds clears the way for progress in the talks, the state Xinhua news agency reported.

Hill said the funds "are being transferred as soon as possible." He didn't give a day, but said his North Korean counterpart didn't press the issue. "We didn't get any ultimatums on whether the money has to arrive in bank accounts today," he added.

The sparring between envoys from Japan and North Korea followed a familiar pattern. Japan has demanded that the North first must clear up a series of kidnappings of Japanese citizens in the 1970s and 1980s by North Korean agents. But North Korean negotiator Kim Kye-gwan renewed Pyongyang's demand that Japan take steps to atone for its 1910-1945 colonization of the Korean Peninsula, and he rejected any further action on the abductions, which are a combustible issue in Japanese politics.

"We did all that we can" on the abduction issue, Kim told fellow envoys, the agency added.

The six-party talks, which are likely to run through Wednesday, bring together the two Koreas, China, Japan, Russia and the United States in negotiations aimed at removing nuclear weapons from the Korean Peninsula.